Publication: Small Business, Big Growth: How investing in SMEs creates jobs
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2021-03
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2022-08-08
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This report presents an updated methodology to estimate the number of SME jobs created as a result of SME loans.5 It analyzes job multipliers across developing countries through a firm-level regression of annual employment change on loan size. Put simply, the framework presented here analyzes the relationship between the size of loans to SMEs and the jobs these enterprises create. This methodology builds on previous papers that found an association between access to finance and job growth, including Ayyagari et al. (2016),6 and draws on data from the World Bank Enterprise Survey (ES) and IFC’s own “tracer surveys” to develop a new SME jobs multiplier that would allow for the estimation of job creation effects that correlate with SME loan size.7 The use of tracer surveys has enabled IFC to analyze how the SME customers of a particular IFC partner financial institution have benefited from greater access to finance and generated positive developmental impacts such as greater SME growth, productivity, and female ownership.
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“International Finance Corporation. 2021. Small Business, Big Growth: How investing in SMEs creates jobs. © International Finance Corporation. http://hdl.handle.net/10986/37842 License: CC BY 3.0 IGO.”
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